WASHINGTON — The Municipal Securities Rulemaking Board's revenue fell 2% in fiscal year 2013 from the previous year, due to decreases in revenue from both underwriting fees and fines for rule violations, according to data included in the self-regulatory organization's annual report.
The MSRB collected $39.3 million in fiscal 2013, down from the $39.9 million of receipts the year before, according to its annual report, which was released Wednesday. The board's fiscal years run from Oct. 1 to Sept. 30. Its revenues come from several sources, including underwriting assessment fees, transaction fees, technology fees, annual and initial fees paid by registrants, data subscriber fees, and fines for rule violations.
The underwriting and transaction fees account for the greatest amount of MSRB revenue, followed by the technology fees, which the report explains "provides for the ongoing maintenance, updating and replacement of aging MSRB technology systems, including the EMMA® website and its technical infrastructure."
Underwriting fees fell more than $1 million in fiscal 2013, a year noted for relatively light bond issuance. The MSRB collected $11.8 million from such fees, down from just over $12.8 million the previous year. The MSRB applies an underwriting assessment fee of $.03 per $1,000 of the par value paid by the underwriters on most primary offerings.
Transaction fees increased, however, jumping to about $14 million from just under $13.7 million in fiscal 2012. The MSRB collects a transaction fee of $.01 per $1,000 of the total par value of both inter-dealer muni sales and sales to customers.
Technology fees, assessed at $1 per transaction, increased to about $8 million in fiscal 2013 from about $7.7 million the previous year.
Revenue from fines for rule violations dropped to just under $2.4 million from around $2.8 million. The Dodd-Frank Act permits the MSRB to receive some of revenues from fines collected by both the Securities and Exchange Commission and the Financial Industry Regulatory Authority for violations of MSRB rules. Fines imposed by the SEC are shared equally with the MSRB, while fines imposed by FINRA are split with a two-thirds share allotted to FINRA and the remainder to the MSRB.
Data subscription fees rose slightly, while annual and initial fee revenues dropped marginally, according to the report.
The MSRB's operating expenses increased by approximately $1 million, climbing to just shy of $27.8 million from just over $26.8 million. About half of the MSRB's expenses were related to its market transparency operations, the report shows, while the remainder is split up amongst rulemaking and policy development, board governance and rulemaking oversight, and market outreach and education.
The self-regulator's total net assets rose by $11.5 million, to $57.9 million from $46.4 million.
The MSRB's annual report also includes updates on the group's activities and goals for the coming year. In 2014, the MSRB will focus on creating a comprehensive price-transparency platform featuring both pre-and post-trade data, and will also be working on implementing a brand-new regulatory framework for municipal advisors, the report states.
